Many of you probably know my good friend and outstanding car dealer, Alan Spitzer from Elyria, OH. If you know Alan you also know that when the government took over GM and Chrysler, Alan lost 10 of his Chrysler and GM franchises, some of which ultimately were reinstated.
Alan and his daughter Alison have written a great book titled "Grand Theft Auto." If you’re at all related to the car business it’s a book you need to read. Another good read on the subject is "Outraged" by Tamara Darvish and Lillie Guyer.
Most of my readers are actually in the new car business. And, for most of my readers, being in the new car business is a huge part of the equation of their success. What a blessing it is to have a new car shingle hanging in front of your business. I am in no way against the new car business/franchise. It’s one of the greatest businesses anyone could ever have an opportunity to be in.
However it becomes a reality day in and day out that the factory is not exactly on your side. A few years ago I wrote an article titled What Happened to Jim Press. Jim Press was for many years a top Toyota executive prior to moving on to Chrysler back in 2007.
The crux of that article was not so much about Jim Press as it was to make the point that "you’re never as smart as you think you are and you’re never as dumb as you appear."
We often find ourselves in a good set of circumstances and other times in a bad set of circumstances. Of course those who can figure a way to maximize either of those are the real winners.
Ok, back to Alan Spitzer and Grand Theft Auto. On page 28 Alan and Alison wrote:
…in the winter of 2008, in a series of conference calls with its dealers, each more desperate than the one before, Chrysler sales and marketing president Jim Press, along with executive vice president Steve Landry, took their case directly to the dealers across the country. Many dealers interpreted these requests as thinly veiled threats to order their quota of vehicles, whether they needed them or not. In almost all cases, they did not. The calls continued into 2009, right up to the Chrysler bankruptcy.
There was an infamous call on Feb. 5, 2009, when Press said to his dealers, "You have two choices. You can either help us or burn us down." And then shockingly: "Those of you who don’t give us the orders, you better hope we fail … because we’ve got a long memory!"
That was Jim Press making the call, but this sort of call could have been made by any auto executive during the course of the history of this business. Maybe not as blunt as Mr. Press, but certainly with the tone and meaning being the same.
So, what’s the point? When you consider the pressure on the new car franchise from the factory and deals like True Car, then you have to draw the common sense conclusion that the only franchise you have total control over is your used car franchise.
My good friend and terrific car dealer Dick Swope out of Louisville, KY, often quotes his father Sam Swope, "We value every one of our new car franchises, but our philosophy is we are a used car dealer who just happens to be a new car dealer."
It’s fascinating to see the money dealers are willing to tie up in a new car franchise, on a bet, like Fiat, yet they won’t invest but so deep into their most controllable and best franchise, used cars. (Have you seen the Jennifer Lopez Fiat commercial? I mean really, do you think she’s ever going to be seen driving a Fiat?)
Many dealers are "sorta" in the used car business. They stick their toe in the water, sometimes a whole foot, but few, very few will get in with both feet. Getting in with both feet means making the same commitment with people and resources as dealers do with a franchise like Fiat.
Grand Theft Auto by Alan and Alison Spitzer was about stealing your business from you. Being in the used car business is about taking control of what is rightfully yours. Used cars are like a college education. Once you get it no one can ever take it away from you. I hope you "get it." That’s all I’m gonna say. Tommy Gibbs